Mumbai: Punj Lloyd, the engineering & construction conglomerate, on Wednesday announced plans to restructure the operational structure of its various global subsidiaries.
"The new structure decentralises the group's operations in various geographies to empower the regional heads and make them accountable for the opportunities that lie ahead," a company statement said.
Punj Lloyd Ltd would now function as a holding company, it said.
"It will provide growth capital to high potential new business opportunities that will eventually become independent operating entities when they achieve scale and profitability," the statement said.
Chairman Atul Punj told DNA Money that earlier all the decisions were being taken by the Punj Lloyd managing director but now the responsibility will lie with each region head and only finance and treasury will be centralised. "We have done organisational restructuring today. The actual demerger and other issues will take 6-12 months," he said.
Punj Lloyd will also leverage Pipavav Shipyard's facilities to bid for offshore projects for oil and gas and power sectors. Under the new structure, the energy vertical will have two independent operating entities -- one for South Asia and South-East Asia, and the other for the Middle-East, Africa and Commonwealth of Independent States (CIS) countries.
"This restructuring is a major initiative to sustain high growth through empowerment with greater focus on profitability and accountability. It will enhance value to the shareholders by decentralising our business segments," Atul Punj said.
In an interview to DNA Money in August, Punj had said the company had in the last few years worked on scaling up, but would now focus on its bottomline. Sembawang Engineers & Constructors (SEC), which Punj Lloyd acquired in 2006, will continue to function as a separate entity. "PL Engineering (erstwhile Simon Carves India) will provide design & engineering expertise not just to the Punj Lloyd group but also to clients in oil & gas, automotive, aviation and other sectors. Simon Carves UK will concentrate on biofuel and nuclear opportunities," the statement said.
Simon Carves (SCL) is embroiled in a legal wrangle with Sabic Petrochemicals in the UK. The case relates to a contract awarded by Sabic to SCL in 2006 for designing and building polyethylene plant in the UK. Late last year, Sabic encashed SCL's performance bond worth £28.5 million citing delays in the completion of the project.


